First impact of NJ minimum wage hike is local government workers

The first increase in the minimum wage from the new law signed Monday by Gov. Phil Murphy takes effect right away, without having to wait until July: The state, counties, municipalities and schools are covered by it for the first time.

Until this week, New Jersey government entities were exempt from the state minimum wage and had only to comply with the federal minimum, which is $7.25 an hour. But they’re now listed as employers covered by the law, and the law – though it phases in future increases – takes effect immediately.

That makes the government’s minimum wage the standard $8.85 an hour. It goes to $10 in July, then up another $1 each Jan. 1 through 2024.

If the increase in the minimum wage is going to affect property taxes, as local government associations contend, one of the first places it could show up is in the school budgets being written and approved this spring.

Jonathan Pushman, a legislative advocate for the New Jersey School Boards Association, said that in the short term, it will increase pay for some substitute teachers, school bus aides and part-time custodians, as well as for some outside contractors providing non-educational services.

“We realize that contracted service providers that are impacted by this legislation will likely pass those costs onto us, which would inevitably be passed on potentially to taxpayers,” Pushman said.

Pushman, like his colleagues who lobby for municipalities and counties, said the mandatory increase in wages, combined with a 2 percent cap on property tax increases, could mean cuts in other areas.

“Going up to $15 could cause stress on other areas of our budget, could lead to reduction in staff and services, which could have a potentially negative impact on the education we provide our students,” Pushman said.

It could also cost some students their jobs, Pushman said.

“A lot of our districts employ student workers not only in the summer but throughout the school year to provide them with valuable work experience,” he said.

Pushman said the students might work in the athletic or administrative offices, help with information technology and assist with before-care and after-care programs. He said the positions generally pay around the minimum wage.

“These aren’t really intended for folks to be able to be able to pay their bills, their family’s bills, but really to provide them with real work experience they can take with them when they graduate,” said Pushman.